Topic Number 653 - IRS Notices and Bills, Penalties, and Interest Charges
Generally, April 15 is the deadline for most people to file their individual income tax returns and pay any tax owed. During its processing, the IRS checks your tax return for mathematical accuracy. When processing is complete, if you owe any tax, penalty, or interest, you will receive a bill.
- Generally, interest accrues on any unpaid tax from the due date of the return until the date of payment in full. The interest rate is determined quarterly and is the federal short-term rate plus 3 percent. Interest compounds daily. Visit Newsroom Search for the current quarterly interest rate on underpayments.
- In addition, if you file a return but don't pay all tax owed on time, you'll generally have to pay a late payment penalty. The failure-to-pay penalty is one-half of one percent for each month, or part of a month, up to a maximum of 25%, of the amount of tax that remains unpaid from the due date of the return until the tax is paid in full. The one-half of one percent rate increases to one percent if the tax remains unpaid 10 days after the IRS issues a notice of intent to levy property. If you file your return by its due date and request an installment agreement, the one-half of one percent rate decreases to one-quarter of one percent for any month in which an installment agreement is in effect. Be aware that the IRS applies payments to the tax first, then any penalty, then to interest. Any penalty amount that appears on your bill is generally the total amount of the penalty up to the date of the notice, not the penalty amount charged each month. See Topic No. 202 for information about payment options.
- If you owe tax and don't file on time, there's also a penalty for not filing on time. The failure-to-file penalty is usually five percent of the tax owed for each month, or part of a month that your return is late, up to a maximum of 25%. If your return is over 60 days late, there's also a minimum penalty for late filing; it's the lesser of $210 (for tax returns required to be filed in 2019) or 100 percent of the tax owed. See Topic No. 304 for information about extensions to file, if you can't file on time.
You must file your return and pay your tax by the due date to avoid interest and penalty charges. Often, you can borrow the funds necessary to pay your tax at a lower effective rate than the combined IRS interest and penalty rate.
Electronic payment options, available on our Payments page, are the most convenient ways for you to pay your federal taxes. However, if you decide to pay by mail, be sure to return the tear-off stub on your bill and use our return envelope, if provided. To make sure your payment credits properly to your account, please:
- Make your check or money order payable to the United States Treasury
- Enter the primary social security number or employer identification number
- Enter the tax year and form number
- Ensure your name, address, and telephone number are on the payment
- Don't send cash
For more information about ensuring proper credit of payments, see Topic No. 158.
The IRS may abate your penalties for filing and paying late if you can show reasonable cause and that the failure wasn't due to willful neglect. Making a good faith payment as soon as you can may help to establish that your initial failure to pay timely was due to reasonable cause and not willful neglect. If you're billed for penalty charges and you have reasonable cause for abatement of the penalty, send your explanation along with the bill to your service center, or call us at 800-829-1040 for assistance (see Telephone and Local Assistance for hours of operation). The IRS doesn't generally abate interest charges and they continue to accrue until all assessed tax, penalties, and interest are fully paid.
There are some exceptions to the general deadlines for filing a return and paying tax, such as:
- If you're a member of the Armed Forces and are serving in a combat zone or contingency operation. Refer to Publication 3, Armed Forces' Tax Guide for additional information and qualifications.
- If you're a citizen or resident alien working abroad. Refer to Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad for details.
- If you were a victim in certain disaster situations. In those situations, the IRS has the authority to extend filing and payment deadlines. Search keyword "disaster" on IRS.gov for more information.
It's important that you review your notice or bill. If after reviewing it you believe there's an error, write to the IRS office that sent it to you within the time frame given or call the number listed on your notice or bill for assistance. You should provide photocopies of any records that may help the IRS correct the error. If you're correct, we'll make the necessary adjustment to your account and send you a corrected notice.
For more information about IRS notices and bills, refer to Publication 594.pdf, The IRS Collection Process. For more information about penalty and interest charges, refer to Chapter 1, Filing Information, of Publication 17.pdf, Your Federal Income Tax for Individuals.